FX traded in very narrow ranges today with majors clinging to 30 pip ranges for most of Asian and early European trade today amidst escalating trade tensions but no meaningful economic news on the calendar.

The latest reports on trade negotiations with both China and NAFTA partners did not sound promising. Chinese authorities denied that the country was willing to make concessions on $200 Billion worth of trade stating that China it will never negotiate under conditions set by the US and won’t make unilateral concessions. Chinese authorities noted that negotiations are still ongoing and “tomorrow is a crucial day”.

The news had little impact on USDJPY which continued to climb through the 111.00 level as momentum flows stayed with the greenback, but the tensions regarding trade put a dent in the euro recovery which lost all of its gains by early morning North American trade.

With no US data on the docket today, the focus in North America will be on the loonie. The market will get a look at Canadian Retail Sales and CPI data and if both reports beat the forecast the loonie could see some buying, but enthusiasm for the pair will be capped by the ongoing NAFTA negotiations saga. Yesterday, US authorities poured cold water on the idea that all sides were close, stating that many issues still needed to be resolved. If a deal on NAFTA proves elusive the loonie will see a much bigger selloff on any failure to make a deal. That’s why unless reports from negotiations shows signs of promise and knee jerk reaction on news today could prove to be an opportunity to sell the unit.